Electrolux AB said second-quarter profit after financials, excluding items affecting comparisons to the previous year, amounted to 765 mln skr, up from 610 mln last time, helped by a slight increase in margins and sales.
Market expectations were for second-quarter profit after financials, including one-off items, of 845 mln skr, said SME Direkt.
The company reiterated its outlook that demand for appliances in Europe and North American should rise this year compared with 2005. It said its efforts to strengthen its position through investment in product development and building the Electrolux brand will continue.
Electrolux said it expects an operating profit at its indoor products division to be ‘somewhat higher’ than in 2005, excluding items affecting comparisons to last year.
Sales increased 4.5 pct to 25.322 bln skr, underpinned by strong sales growth in durable consumer goods in North America, but were pressured by a slight fall in Asia Pacific.
Operating profit excluding one-off items was 844 mln skr, up from 750 mln a year earlier, but well below consensus forecasts of 966 mln. The result was hurt by a 23 pct drop in operating profit at its durable consumer goods division in Europe. Margins in Europe fell to 3.6 pct from 4.8 pct.
The company attributed the lower result in Europe to a clear-out of inventories, which stemmed from an EU directive on hazardous materials.
‘During the second quarter, remaining products that did not meet the criteria of the directive were sold at discounted prices,’ the company said.
At consumer products North America increased 9.5 pct and operating profit by 9.4 pct to 383 mln. Refrigerators and cooking equipment achieved the strongest sales. Margins at the division were stable at 4.1 pct.
The stronger performance reflected the benefits of price increases and an improved mix of products over the past year, the company said.
All other divisions reported improved operating profits and margins.
From Forbes